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January 17, 2014

Charles Goldman Plans to Focus on 4 Areas as Head of AssetMark

The newly named CEO of AssetMark plans to leverage firm’s relationships with independent advisors and ‘punch above our weight class’

On Monday, AssetMark announced that Charles Goldman had been named president and CEO of the former Genworth Financial Wealth Management, replacing Gurinder Ahluwalia. On Wednesday, the former Schwab and Fidelity institutional head provided in an interview his priorities in leading the TAMP company.

Goldman said based on his experience of the last few months as chairman, he plans to focus on four different areas. The first is what he called “the relationship piece.”

At AssetMark, he said, “we’re relationship-oriented, rather than some of our competitors who are more technology based.” The “more than 100 people working with advisors” will work on deepening existing relationships with advisor clients, the majority of whom are representatives of independent broker-dealers, in addition to those RIA customers “who like the idea of outsourcing their investment platform.” The second focus will be on that platform, including “the way we conduct due diligence and construct portfolios.”

AssetMark “needs to continue to innovate,” he said, making the strategies the firm offers “simple, easy to understand” for advisors, in addition to making it “easy to explain to their clients.” Innovation will happen on both “the risk side” and in diversified portfolios built by asset managers “who can blend different assets — for all the times in between good and bad times.” AssetMark needs to “find the best strategists, and work with advisors in building portfolios,” he said.

Then there is “job three,” which revolves around the firm’s technology platform, he said. While the focus on deepening relationships with advisors is important, “we live in a time where mobile apps, execution of trades, reporting and proposal generation are all delivered via technology” that he promised would be raised to “world-class standards” to better allow advisors to “better manage their practices.”

The final focus is to “punch above our weight class,” Goldman said: to “bring some of the intellectual capital we have around practice management and investment portfolios” and show its advisor clients how to apply that intellectual capital to their practices.

Does that mean AssetMark will be providing guidance around advisor succession planning? “We’ve done quite a bit of work on that already," he said, especially on how an advisor can “prepare [their] children to run this business—that’s the kind of intellectual capital that we’ve done and nobody knows about."

In practice management, AssetMark plans on helping advisors “shift the discussion from the wealth piece, which is critical, to what does it mean to be independent,” to engage in “in discussions of purpose” with their end clients.

“Most advisors have a hard time talking about life purpose with their clients,” Goldman said, and while “yes, you need to talk about investing, if you can have a discussion” about what your clients value in life, “then you’re a great advisor.”

It’s a three-step process, he suggested: creating an awareness of the need to talk about a client’s life purpose; then “training advisors with the skills,” then providing the tools to fit those discussions into the advisor’s financial planning and CRM software.

What will be the benefits of private equity ownership for AssetMark? The benefits are many, Goldman said, starting with an “aligment of interest” from GenStar and Aquiline. “Our owners are interested in us growing the business. They believe in what we’re doing. They have no concerns about quarterly earnings — they’re interested in building the business long term,” he said, because “that’s how you create value.”

Goldman says that he’s “intensely focused on what [his] competitors are doing” and is aware of the consolidation taking place among AssetMark’s main customers — independent broker-dealers—and the challenges the industry may face from the “externalities of the regulatory environment” and the “the lack of trust in institutions.”

However, when he looks at the “dynamics of the marketplace — the need for more wealth management and the complexity” of providing advice, and the growth of the independent advisor industry, “those are good trends that are not going away.”

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